Breaking down the future of venture capital in a post-covid world

Nasir Qadree, Zeal Capital Partners Founder, joined Yahoo Finance Live to discuss the future of venture capital post-covid.

Video Transcript

[MUSIC PLAYING]

SEANA SMITH: Zeal Capital Partners closing a $62 million oversubscribed fund this week. Now, this fund is focused on advancing economic mobility by narrowing the wealth gap, also focusing on narrowing the skills gap. So we want to bring in Nasir Qadree. He's the founder of Zeal Capital Partners and man behind this. And, Nasir, congratulations to you on this latest raise. I guess talk to us just about the opportunities that you hope this fund provides.

NASIR QADREE: First of all, Seana, it's great to see you and be with you this afternoon. So the fund, as you mentioned, is laser-focused-- it's a sector-specific fund laser-focused on narrowing our wealth and skills gap by way of making investments, early stage investments, that's precedes series A, into high growth companies across the financial technology and the future of work sector.

It's-- it's two sectors that I've been investing in over the past seven years. And just super excited to really partner with diverse management teams that are rethinking the building blocks of wealth, from education to employment pathways to financial wellness, that we strongly believe is pivotal to turbocharging economic mobility across the country.

JARED BLIKRE: So when you look at the retail banking space, there's still a high percentage, relatively speaking, of the unbanked and the underbanked. And I understand that you're doing some work with that. Can you tell us about that venture?

NASIR QADREE: Yeah. So when we think about our fintech vertical, we spent a lot of time here, and we're-- we're identifying four subsector areas, one of which you identified. We're seeing a great deal of innovation across rethinking credit access expansion, particularly for the un and underbanked, new technologies that directly support the un and underbanked around savings and wealth creation. So consumers rethinking their financial behavior.

And of course, we're also making investments in partnerships around early stage companies that are directly tied to supporting new and small businesses. So infrastructure tools that directly support new and small businesses. And so [INAUDIBLE] is a great example, which is probably the one you're alluding to, that announced their series A that-- that's directly innovative technology that's taking rental reporting as a means to increase FICO scores and financial wellness.

SEANA SMITH: What are your plans to grow this business? Because I was reading since October 2020, you've invested in five technology companies. It sounds like you have quite the runway ahead of you. What are you hoping that number looks like in 5 to 10 years from now?

NASIR QADREE: That's a great question. So we're running a highly concentrated portfolio. We're not spraying and praying. We, again, are taking a diligent approach to every company resource and conduct diligence. So over the next four years, we're looking to invest between 24 to-- 24 to 30 companies over index or allocation and see it in a series A, which yields about five to-- five to eight companies each year. .

So the North Star, A, is to invest in innovative solutions that are, again, narrowing-- vertically focused on narrowing our wealth and skills gap. So, A, seeing that market opportunity game-changer innovations, but also those companies that are mission-related, that are having a huge impact on the un and underbanked and the low wage worker, the student. And so we're just super excited that, you know, as we think about investing in high growth tools that are directly tied to narrowing the wealth and skills gap across the US.

JARED BLIKRE: I've read you've made a deal with PayPal Ventures, and I'm just wondering what the nature of that deal is and any other partnerships that you'd like to talk about here.

NASIR QADREE: Yeah, so we're-- what differentiates us and what we're most excited about is that the plethora of institutions, credible notable institutions, that-- that speak to our value proposition when sourcing and exploring partnerships with founders. So you mentioned PayPal, which is one of our early investments. Truist Ventures, our anchor investor, who is not only viewed as a, like other institutions, as investors in the fund, but they're proactively taking a stance on investing in fund managers that also have an impact lens, are looking to level the playing field for more diverse founders.

We're solving, I like to call them, "painkiller problems" versus fighting the problems. Painkillers are-- or vitamins are nice to have. Painkiller problems, like education and financial wellness, are needs to have. And so really excited for ventures of corporations like Truist Ventures and PayPal and Bank of America, Synchrony Financial, [INAUDIBLE], Sloan Foundation, notable private foundations, and even endowments like HBCUs, like Hampton University, my alma mater, and SNHU, Southern New Hampshire University.

So this consortium of limited partners really speaks to the viability of the fund. We believe that entrepreneurs noted will note that they're not just getting us at the Zeal Capital Partners team, but they're also getting the extension of notable institutions that will proactively support as we think about post-investment value duration. So literally rethinking how we source, how we invest and scale high growth companies, is what we're super excited about. And we couldn't be excited to have partners like Truist and PayPal along this journey with us so early.

SEANA SMITH: Nasir Qadree, founder of Zeal Capital Partners, thanks so much for taking the time to join us. We wish you all the best.